Our market development work is important to achieving our statutory objective to promote competition in, reliable supply by and the efficient operation of the electricity industry for the long-term benefit of consumers.

If an anomalous event or outcome occurs in the market or the broader electricity sector, we investigate it to determine the causes and whether something can or should be done to prevent such an event or outcome from occurring again.

Authority staff considered the cost of claiming a pricing error, but did not proceed due to its low estimated impact, and with the cost of investigating it likely to exceed the market impact.

We met with NZX to discuss this matter and the cause of the error has been identified and resolved.

Background

A metering situation notice is raised by the pricing manager when incomplete, incorrect or an initial estimate of metering information is provided to them for grid exit points or grid injection points specified in the annual consumption list. The threshold for the number of grid exit points or grid injection points at which a metering situation is declared is dependent on the quantity of annual consumption at those points specified in the annual consumption list.

Revised consumption data is provided to the pricing manager to resolve the metering situation. Further details on metering situations can be found in Part 13 of the Code.

False metering situation

The false metering situation detection on 28 April was the result of an out-of-date annual consumption file used by the pricing manager which resulted in the estimated consumption provided at KAW0112, for the calculation of final prices, triggering the metering situation. The North Island node KAW0112 is not listed in the updated annual consumption list and so a metering situation would not have been declared if this latest file was used.

As a result of the metering situation, the grid owner provided revised consumption data for three nodes in the North Island (KAW0112, KIN0112 and NPK0331). The revised consumption data was subsequently used in the calculation of provisional prices which were published as final prices on 30 April 2013.

We calculated that had the original consumption data been used, daily average prices would have been slightly lower. Prices at Benmore, Haywards and Otahuhu would have been 0.03%, 0.05% and 0.04% lower with the greatest reduction at Kinleith (KIN0113) where daily average prices would have been 0.69% ($0.53/MWh) lower than the current final price. It is estimated that total generator revenue and load payments would have reduced by $4.2k due to the lower prices calculated using the original consumption data.